Journal Register Co. employees’ gallows wait begins while private equity owner hands off property to its affiliate
The United States Bankruptcy Court for the Southern District of New York will hold a hearing today that will finalize the sale of the Journal Register Company, transferring ownership from New York hedge fund Alden Global Capital to 21st CMH Acquisition Co., an affiliate of Alden Global Capital. In preparation for the move the Journal Register Co. said it will then cease operations and let all its employees go, most likely hiring back far fewer of them. The move is required by the federal law requiring a 60-day layoff notice.
“We have asked 21st CMH Acquisition Co. to operate the business using substantially all of our current employees,” Robert Monteleone, chief human resources officer for Journal Register, wrote to employees. “We have expressed to 21st CMH Acquisition Co. that a competent and competitive employee population is critical to the company’s ongoing success.”
As the new owners will essentially be the same as the old owners, and the new management the same as the old management, one can only say that the letter was a cynical and less-than-honest communications from the company. That such a financial move is legal in the U.S. is shameful.
That 21st CMH Acquisition Co. was the sole bidder in the bankruptcy proceedings should be of no surprise. The Journal Register Co., which has embraced a newsroom-centric approach to newspaper publishing, has lagged far behind its industry cousins in the development of digital media products. Its advisory board is comprised of Jeff Jarvis, Jay Rosen, and Emily Bell.
At the time Journal Register Co. CEO John Paton announced the board in March of 2010, he said “the media landscape and how news is both created and consumed is changing rapidly. In an era where the audience has gone from spectator to participant through social media and other digital innovations our Company must re-define what we do and how we do it. Our Advisory Board is charged with helping us assess the changes we need to make and pushing us to experiment in new ways of news creation and delivery.”